NEW YORK, N.Y.—The Risk and Insurance Management Society, Inc. (RIMS) supports the efforts of Congressman Dennis Moore, D-Kansas, and Congresswoman Deborah Pryce, R-Ohio, on introducing HR 5792 Increasing Insurance Coverage Options for Consumers Act to the U.S. House of Representatives yesterday. This important legislation represents a much-needed step forward in increasing coverage options for commercial property insurance.
"RIMS approves of the Increasing Insurance Coverage Options for Consumers Act of 2008," says Terry Fleming, member of RIMS board of directors and director of risk management for Montgomery County, Maryland. "Risk retention groups (RRGs) provide competition in the marketplace, helping to increase coverage availability and keep costs reasonable. RIMS is pleased that the proposed legislation provides the opportunity for these groups to expand their programs to include property coverage."
Congress passed the Products Liability Risk Retention Act in 1981 in response to recurring shortages in product liability insurance. This legislation authorized a group of similar businesses with similar risk exposures to form RRGs to self-insure those risks on a group basis and created risk purchasing groups (RPGs) to allow insurers to market on a group basis. In 1986, the Act was amended to its present form to include all types of liability coverage, except workers' compensation, while also providing that RRGs and RPGs would be regulated primarily by their domiciliary states, with only limited regulatory oversight by non-domiciliary states in which the groups operate.
HR 5792, the Increasing Insurance Coverage Options for Consumers Act of 2008, would help to stabilize prices and increase coverage availability in the commercial property insurance marketplace by allowing RRGs and RPGs to expand their insurance offerings to include commercial property coverage. Currently, they are limited to offering liability coverage.
For more information on RIMS legislative activities, visit www.RIMS.org/LegislativeAction.